Law: Sales Tax Act, (III of 1951)

Section: 8

Law: Constitution of Pakistan, 1973

Section: 185(3)

Sales Tax Act, 1951 (III of 1951)-Section 8, read with Constitution of Pakistan, 1973, Art. 185(3)-Exemption-Licensed manufacturer of Washing soap-Raw material imported free of tax for production of washing soap-Sales-tax abolished on washing soap with eject from 14-15-1965- Question whether the raw material imported free of tax for production of washing soap was liable to sales-tax-Leave to appeal granted to consider the question turning on proper construction of the sales tax and thus raising a question of law of public importance. Cases referred to: Noorani Cotton Corporation v. The Sales Tax Officer, Lyallpur (P L D 1965 S C 161)=(1965) 11 Taxation 184 (S.C.) and Commissioner of Sales Tax v. H. Muhammad Hussain & Co. (P.L.J. 1974 Lah, 141)=(1974) 29 Taxation 44. ORDER DORAB PATEL, J. The petitioners manufacture washing soap under licences issued under Section8 of the Sales Tax Act, 1951 (hereinafter called the said Act) and they used to pay duty on the soap manufactured by them under the said Act. However, by a notification dated 14-6-1965, the sales tax on soap was abolished. Now, when the petitioners submitted their returns to the Sales Tax Officer for the assessment years 1964-66, because the sales tax on washing soap had been abolished with effect from 14-6-1965, the Sales Tax Officer demanded sales tax on the raw material consumed by the petitioners in the manufacture of washing soap. The petitioners challenged the orders passed against them by the Sales Tax Officer in appeals before the Income Tax Appellate Tribunal and on the basis of an earlier decision given by it the Tribunal held that the petitioners were not liable for sales tax on the raw material which was locally made, but the Tribunal dismissed the appeal of the petitioners against the levy of sales tax on their stocks of imported raw material. Therefore, the petitioners made references under Section 17 of the said Act to the Lahore High Court in which the question raised was whether on facts and in the circumstances of the case the Appellate Tribunal was…

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